Decentralization and Institutional Development in Indonesia (A Literature Study)

Candra Fajri Ananda


Institutional development for better governance, to allow for better implementation of decentralization [included fiscal] and other policies, will take years, as unfinished if not decades, to complete. Such institutions must be built domestically, or even locally, they can not be imported from others. German experiences have shown how their adjustment efforts against the environment changes such as globalization, European Union, domestic inter-regional disparity reunification) for a better quality of development. By analyzing some theories and comparison German and Indonesian experiences, there are three recommendations: (i) existing cultural context, (ii) influencing of changing role and relationship, and (iii) questions on timing and sequencing ofthe policy. These three institutional aspects should be considered in policy design at all level ofthe governments and need consequently a strong central government to lead and manage the process.

Keywords: Decentralization, local institutions, comprehensive

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